SSA Can’t Estimate Financial Impact Of Illegal Work On Future Social Security Costs

SSA Can’t Estimate Financial Impact Of Illegal Work On Future Social Security Costs

By Mary Johnson, editor

The fate of President Obama’s controversial executive action on immigration remains tied up in court. The potential long-term financial impact of the actions on Social Security and Medicare remains unknown, and elected lawmakers have been unable to agree to immigration policy changes legislatively.

Obama’s controversial executive action would defer the deportation of up to five million illegal immigrants, including older adults who have children who were born in the U.S. (and thus U.S. citizens). In addition, his executive actions provide the work authorization required to receive Social Security and Medicare, once other qualifications are met. Texas and 25 other states are challenging the legality of Obama’s actions. They are being supported by TSCL, 12 other groups, and 113 Members of Congress who argue in an amicus brief, that “the President acted contrary to both the express and implied will of Congress.”

TSCL is particularly concerned about adding significant new long-term permanent costs to Social Security and Medicare by providing temporary work authorization to millions of people who worked illegally prior to gaining authorization. The high degree of uncertainty about the potential future costs was made evident months before Obama ever announced the executive action in November of last year.

In 2013 the Social Security Office of the Actuary released an actuarial note regarding providing information of the effects of unauthorized immigration on the status of the Social Security Trust Funds. The Office of the Actuary stated that it has difficulty “in determining what portion of taxes paid to and benefits received from the Social Security Trust Fund are derived from the earnings of immigrants working without authorization.” The obtuse note was frustrating to dissect as there was no discussion on the reasoning behind assumptions and there was no attempt to estimate the long-term cost in Social Security benefits of unauthorized work. Here are some eye-opening points that the Office of the Actuary did provide:

  • 7 million immigrants have a Social Security number issued in their names — obtained either by using a fraudulent birth certificate, or overstaying a visa that has expired. The actuary said this group can “work, pay taxes, and have earnings credited to their record for potential benefits in the future.”
  • Noncitizens who began receiving benefits before 1997, and who never received legal work authorization, can receive benefits. In addition, individuals who never obtained work authorization, but who received a SSN prior to 2004, and now live abroad, could potentially receive a benefit.
  • About 30 percent of the “other than legal ” immigrants who were living in the U.S., and age 62 in 2000, would be eligible to receive retiree benefits.

To learn more about President Obama’s Executive Action On Immigration, see TSCL’s F.A.Q.: “What Does “Executive Action” On Immigration Have To Do With Social Security and Medicare?”

Sources: “Appeals Panel Weighs Fate of Obama’s Immigration Overhaul,” Michael Shear, The New York Times, April 17, 2015. “Effects Of Unauthorized Immigration On The Actuarial Status Of The Social Security Trust Funds,” Actuarial Note #151, Social Security Administration, April 2013.